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Should NVIDIA Investors Be Concerned About This Massive Risk?

A few customers make up a huge amount of NVIDIA's revenue, which is a huge risk for long-term profitability.

By Travis Hoium – Jul 17, 2024 at 12:08PM EST

NVIDIA (NVDA +1.31%) is the hottest name on the stock market and investors are expecting explosive artificial intelligence growth for years to come. But most of that growth has been driven by a small number of companies ordering AI chips. In this video, Travis Hoium shows just how concentrated NVIDIA's customer risk is and why it could end up disappointing investors.

*Stock prices used were end-of-day prices of July 16, 2024. The video was published on July 17, 2024.

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About the Author

Travis Hoium
Travis Hoium is a contributing Motley Fool stock market analyst covering solar energy, technology, and growth stocks. Before The Motley Fool, Travis was a mechanical engineer at 3M and founded a virtual reality company. He holds a bachelor’s degree in mechanical engineering and a master’s degree in business administration from the University of Minnesota.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Stocks Mentioned

Nvidia Stock Quote
Nvidia
NASDAQ: NVDA
$199.09
(+1.31%)+$2.58
Microsoft Stock Quote
Microsoft
NASDAQ: MSFT
$411.37
(+4.64%)+$18.26
Alphabet Stock Quote
Alphabet
NASDAQ: GOOGL
$337.16
(+1.28%)+$4.25
Amazon Stock Quote
Amazon
NASDAQ: AMZN
$248.50
(-0.21%)-$0.52
Meta Platforms Stock Quote
Meta Platforms
NASDAQ: META
$671.80
(+1.41%)+$9.31
Alphabet Stock Quote
Alphabet
NASDAQ: GOOG
$334.59
(+1.21%)+$4.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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